Central Bank of Egypt monthly report has shown that total inflows decreased to 3.4 BN.

Insights MENA

Economic Outlook

Central Bank of Egypt monthly report has shown that total inflows decreased to 3.4 BN USD in Q2-2018 compared to 3.9 BN USD in Q2-2017. This was due to the outflows of foreign investments that also decreased to 1.56 BN USD in Q2-2018 compared to 1.57 BN USD in Q2-2017.

The World Bank announced that the growth of the Egyptian economy increased by 0.2% to be 5% in the fiscal year 2017/2018 and is forcasted to reach 5.5% in the fiscal year 2018/2019. By 2020 it is expected to advance to 5.8%. Moreover, the World Bank stated that Saudi Arabia economy is expected to increase to 1.8% in 2018 and 2.1% in 2019. By 2020, the kingdom economy is forecasted to achieve a 2.3% growth.

Saudi Arabia and the UAE announced a joint vision for economic, developmental and military integration through 44 strategic projects. The two countries signed 20 MoU for more than 60 joint projects to be implemented over the next five years in sectors including oil and gas, banking, nuclear energy and defense.

The construction sector in the UAE by the end of Q1-2018 has been provided with 300.5 BN AED credit facilities, a growth of 12.5% compared to 267.02 BN AED in Q1-2017. Loans obtained by the sector account for around 20.3% of the total loans provided by UAE banks to all economic platforms in the country, which amount to 1.472 TR AED.

In Kuwait, the minister of finance Dr Nayef Al-Hajraf has confirmed that the FinancialSustainabilityProject is aimed to reduce the State budget deficit to 3 BN KWD. This is the reason behind the government proposal to obtain 25 BN KWD loan from the general reserves of the State.

Bahrain Oil Minister Mohammed Al-Khalifa expected that the new pipeline project between Bahrain and Saudi Aramco will be finished during 2018. The new pipelines' length is 118 kilometers, of which 42 kilometers are offshore, while the remaining 73 kilometers on shore, with 400,000 barrels per day (bpd) capacity. In 2015, Aramco signed an agreement with Bahrain Petroleum Company (BAPCO) to start establishing oil pipelines between the two nations.

Jordan state grain buyer has issued an international tender to purchase 120,000 tons of animal feed barley to be sourced from optional origins. Jordan has struggled to purchase wheat and barley in tenders in past months after terms on specifications and payment were introduced which reduced tender participation by international trading houses.

Political Events

Egypt cabinet submitted its resignation to President Abdel Fattah al-Sisi following his swearing-in for a second term after a landslide election victory. The government, headed by Prime Minister Sherif Ismail, will stay on in a caretaker capacity until the new one is appointed. The move is routine ahead of the formation of a new government after Sisi's re-election in March.

France handed over to the Egyptian Foreign Ministryeight smuggled Egyptian artifacts, including a Pharaonic mask made of wood seized by the French authorities at a train station in Paris. The Egyptian Embassy in Paris contacted the French authorities to stop the sale of the artifacts and take necessary measures for its return to Egypt, after Egypt provided documents proving that the above-mentioned pieces were Egyptian archaeological artifacts.

Saudi Arabia announced that two missiles were fired toward the Kingdom's territory. The ballistic missiles, fired by the Iran-back Houthi militia, were detected by the Saudi air force at 18:45. One has failed and landed inside Saada Province in Yemeni territory and the other in an underpopulated desert area.

Jordan new Prime Minister Omar al-Razzaz is aiming to build a cabinet to tackle the debt-ridden country's economic challenges and calm the biggest protests in years, after the resignation of Hani Mulki to defuse public anger over economic policies in Jordan. Despite the change in leadership, hundreds pressed ahead with protests overnight, gathering near the Cabinet office with signs and flags. Plans to raise more taxes have brought thousands onto the streets since last week.

Stock Market

.TASI telecommunication sector has increased led by STC and Mobily.

.QSI real estate sector has increased led by Ezdan. In addition, telecommunication sector increased led by Ooredoo and Vodafone Qatar.

Companies Transactions

Middle East Oil Refinery (MIDOR) and France-based Technip Company have signed a contract for refinery project expansion. The petroleum minister Tarek El Molla announced that the contract value amounted to 1.7 BN USD, while the project total cost recorded 2.2 BN USD. The project aims at increasing petroleum products, in addition to raising the refinery capacity to 175,000 barrels per day (bpd) instead of 115,000 bpd.

The European Bank for Reconstruction and Development (EBRD) has agreed to fund part of Cairo metro project. The new financial agreement includes the purchase of sixtrains for the second line of the Cairo metro.

Arab Contractors Company (ArabCo) announced its joint project with Suez JV, a French-based utility company which operates largely in the water treatment and waste management sectors. They have won a 58.3 MM USD deal from the Egypt government to boost the efficiency of the wastewater treatment plant in Alexandria, Egypt. The scope of work includes construction of fourtanks with a diameter of 36m and a height of 23m for sludge collection besides a distribution tower, a boiler building, gas tanks, gas treatment units, a tank for bio gas sludge and receiving tank.

In Saudi Arabia, Fawaz Abdulaziz Alhokair & Co has raised a 1.125BN SAR (300 MM USD) Islamic loan with a group of regional banks, a month after concluding a much larger facility for one of its businesses. The selected regional banks are National Commercial Bank, Samba Financial Group and Abu Dhabi Islamic Bank. The loan will be used to repay a syndicated loan obtained in 2014 and sukuk issued in 2014. The new debt facility has a seven-year maturity.

Saudi Aramco has agreed a term contract with Indonesia's Pertamina for the first time to supplygasoline over July to December this year. Aramco Trading will be supplying a total of about 1 million barrels a month of 88-octane and 92-octane gasoline grades. This would likely be the first time Aramco Trading is supplying term barrels into Indonesia, Asia's largest importer of the motor fuel.

Mashreq, Dubai third-largest bank by assets, has applied to Saudi Arabia central bank for a banking license as it seeks to benefit from opportunities surrounding the kingdom ambitious economic reform plans. It follows similar moves by other foreign lenders including Goldman Sachs, Citigroup and fellow United Arab Emirates-based lenders First Abu Dhabi Bank and Emirates NBD.

Vnesheconombank (VEB), a Russian development bank, has opened its representative office in Abu Dhabi, UAE as part of its Middle East strategy. Vnesheconombank has been actively cooperating with the UAE, the Middle East, and the Islamic world as a whole. They are working to engage investors, raise finance, enhance trade and foster greater economic ties, and also to promote high-technology exports from Russia.

Barwa Real Estate Company (BRES) shareholders had approved increasing non-Qatari ownership limit to 49% instead of 25% during an extraordinary general assembly (EGA). The step aims to achieve the Qatari bourse's vision in order to promote the Qatari financial market and develop its mechanism to be a regional financial hub.

VIVA Bahrain, a leading telecom services operator in the kingdom, has launched the first live and public 5G network demonstration in the kingdom ahead of its deployment at homes and businesses in coordination with a number of 5G-enabled devices.

Sports and Culture

President Abdel Fattah al-Sisi met the footballnational team to offer them farewell before traveling to Russia for the World Cup, which starts on Thursday 14th of June. The whole team headed to the presidential palace, except for Saad Samir who is currently in Russia. Team manager Hector Cuper, and other team officials were also present.

At the edge of the ancient pyramids of Giza, some 5,000 construction workers labor around the clock to finish the long-awaited Grand Egyptian Museum. Expected to open by the end of this year, the 5.2-million-square-foot structure will become the world's largest museum devoted to a single civilization. This will be the museum of the 21st century, costing more than 1 BN USD.

Emirates airline announced that it will start a third daily service between Moscow's Domodedovo, DME, Airport and Dubai, commencing on 25th of October 2018. Demand for travel has grown significantly over recent years, leading to the airline's launch of this third flight to Moscow.

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